Soda Tax in Mexico Succeeds in Cutting Consumption

Noticeable drop in sugar-sweetened drink sales after tax adopted

A 10% tax on sugar-sweetened beverages (SSBs) implemented in Mexico 2 years ago -- amount to one peso per liter -- appeared to have the desired effect of reducing sugar consumption, researchers found.

Purchases of sugar-sweetened beverages fell 6% during the year after the tax went into effect at the start of 2014, compared with the previous year, according to Shu Wen Ng, PhD, at the University of North Carolina Gillings School of Global Public Health in Chapel Hill, and colleagues.

And, the decline appeared to grow over the year, ending at a 12% decrease in monthly December sales when compared with what consumption would've likely been without the tax, the researchers estimated.

Purchases of the sugary beverages declined most in the lowest socioeconomic group, with a 9% decrease over the year, ending at 17%, they wrote in The BMJ.

Consumption of nontaxed beverages was up by 4%, although the number was not significant, the authors added, and was driven mostly by a higher consumption of bottled water.

"These results show that excise taxes on SSB's are a promising way to lower purchased (and thus consumption) of unhealthy beverages, and people may be substituting with healthier beverages such as water," wrote Ng in an email to MedPage Today. "Many other countries are becoming convinced from the growing evidence of this policy strategy in the past few years and have also instituted SSB taxes (e.g., Chile, Barbados, France) lately; others are discussing it as an option."

The originally proposed tax was 2 pesos per liter -- or around 20% of the cost of most drinks rather than the 10% now in effect -- which would probably have meant larger decreases in consumption, said Ng. The Mexican government also instituted an 8% sales tax on junk foods like cookies, candy, and ice cream that went into effect at the same time.

"With time there will be more empirical evidence on this issue," Ng wrote. "We will need to see what the longer-term responses by both consumers and industry will be."

The authors obtained data from January 2012 to December 2014 from Nielsen Mexico's Consumer Panel Services. Mexican households in 53 cities were sampled, representing 63% of the population and 75% of food and beverage expenditures. Purchase of beverages varies by season and depends on weather and holidays, the researchers noted. Consumption was decreasing in all three of the socioeconomic groups but most rapidly in the highest socioeconomic group before the study even started.

There were larger reductions in purchases of noncarbonated taxed drinks than carbonated taxed drinks. The authors hypothesized that this might be because noncarbonated drinks are often more expensive and more economically elastic -- they can be replaced more easily, possibly with cheaper sodas.

Because the authors didn't look at data on nutrients of beverages that decreased in consumption, they didn't have any information on how the decrease might affect health outcomes. But a separate study released today, reported inTheLancet, estimated that reducing sugar content in sugar sweetened drinks by 40% over 5 years could prevent half a million people from becoming overweight and a million people from becoming obese.

It would also likely affect diabetes rates, according to the study. Around 70% of adults in Mexico are overweight or obese, and the prevalence of diabetes there is among the highest in the world, Ng's group pointed out.

Thus far, the city of Berkeley in California is the only place in the U.S. to adopt a sugar tax. There are a couple of major barriers to a larger scale tax on sugary drinks being adopted here, according to Robert Lustig, MD, at the University of California San Francisco.

For one, sugar is subsidized in the U.S., so the government would be taxing partially subsidized products if it didn't repeal the subsidy first. In addition, there's heavy lobbying from the sugar industry. "As long as soda costs less than milk ... we will not see this happening anywhere else in America," wrote Lustig in an email to MedPage Today.

Limitations of the study by Ng's group included an inability to establish causation, and incomplete data on purchase of dairy drinks prior to October 2012. In addition, only Mexican citizens in towns of more than 50,000 people were represented in the study.

"We hypothesize that reductions among rural households would be greater than those among urban households," they wrote. "However, without actual data, this assumption is purely speculative."

The authors added that sugary drinks consumed away from home -- purchased at a street vendor or in a fast food restaurant, for example -- were not included in the analysis.

"Future research would provide estimations on the effect of the tax on other subgroups to assess differential changes, for example among high consumers of unhealthy beverages," wrote Arantxa Colchero, MD, PhD, a co-author at the Instituto Nacional de Salud Pública in Mexico, in an email.

The study was supported by grants from Bloomberg Philanthropies, the Robert Wood Johnson Foundation, the Instituto Nacional de Salud Pública, and the Carolina Population Center.

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